Impact of Circular Leadership on Circular Economy Adoption: Analysing Mediating Role of Organisational Climate Using a Dual-Stage PLS-SEM and ANN Approach

Fahmida Akhter; Mohammad Rokibul Hossain; Arun Bhatia

doi:10.2478/ers-2026-0009

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Impact of Circular Leadership on Circular Economy Adoption: Analysing Mediating Role of Organisational Climate Using a Dual-Stage PLS-SEM and ANN Approach

Economic and Regional Studies / Studia Ekonomiczne i Regionalne

Volume 19 (2026): Issue 1 (March 2026)

By: Fahmida Akhter, Mohammad Rokibul Hossain and Arun Bhatia

Open Access

|May 2026

Abstract

Subject and purpose of work

Subject and purpose of work. This study examines the impact of Circular Leadership (CL) and Organisational Climate (OC) on Circular Economy Adoption (CEA) at the organisational level, drawing on Goal Setting Theory.

Materials and methods

Data were collected from 431 employees of environmentally sensitive organisations using purposive sampling. Analyses were conducted with SPSS, SmartPLS for PLSSEM, and RStudio for Artificial Neural Network (ANN) validation.

Results

Findings indicate that both CL and OC significantly and positively affect CEA, with OC partially mediating the relationship between CL and CEA. The ANN results further confirm that CEA is best predicted when CL, identified as the most influential factor, interacts with OC.

Conclusions

The study is the first to empirically validate Circular Leadership as a second-order construct encompassing Vision & Inspiration, Supportive Behaviour, Rewards & Recognition, and Environmental Commitment, offering new insights into leadership and sustainable organisational transformation.

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